Thursday, January 24, 2013

Amway Excuses?

've been a blogger now for a number of years. I've debated with Amway apologists and they ultimately resort to excuses and/or personal attacks when they run out of defenses. Food for thought, when you have to make excuses about why your opportunity isn't a scam or a pyramid scheme, that should already make you stop and think for a minute. The easy excuse is to say that "my group isn't like that". Yet I see testimonies and statements that indicate to me that things have not changed, even in all the years since I left the Amway business myself.

Even the product's prices need to be justified. That there is concentration or other factors that really make Amway stuff a better value. Strange how that better value doesn't seem to translate further once an IBO realizes that there is no residual income at the end of the rainbow. Many IBOs don't seem to mind paying for Amway stuff when they believe that they will one day walk the beaches of the world while more money than they can count will keep rolling in. When the dream fades, so does the desire to purchase these awesome products. If not, with tens of millions of former IBOs, Amway sales should be through the roof after all these years. But it hasn't. Although Amway recently reported an increase in north american sales, that wasn't the case in the last 10 years. Amway apologists even have excuses about why that is the case.

Amway also reported recently, that they have updated their average IBO income. While it is still miserable, it has gone up, although a clear explanation as to how and why they calculated the "average income" was not apparently given. So the debate continues. Critics analyzing and predicting how and why, and Amway apologists making excuses and justifying their position. Why not just be transparent and end the debate once and for all? I think most people know the answer. The bottom line for most is whether or not they make a net profit. For the vast majority of IBOs, especially the ones on the system, the answer is a net loss. It is predictable and easy to conclude. The 6-4-2 or any other version of the compensation plan clearly shows that very few people can make any decent money. If a platinum IBO typically has 100 or more IBOs, that is your answer there. It should be noted that a platinum might not even be very profitable if they are sold out on buying system tools.

So IBOs and Amway defenders, are you making money (net profit)? Or are you just making excuses?

6 comments:

My view of this business is that it continues to grow because the plan presents easy to make wealth that attracts naive recruits who hang in there long enough to create some revenue for uplines. The high pins are experts at recruiting and motivating.hence they build groups big enough to keep it flowing. The people on the ground are useless at this , make no progress and quit. They cant sell products due to price. Hence 4 percent only are sales to non ibo. So ibo buy products themselves thinking they will recruit enough doing the same and generate bonuses. This falls flat quickly causing high quit rates. This in turn breaks motivation for the immediate uplines. Its irrelevant for the top of the pyramid as they have enough in their group to maintain a net income of recruits. But even high pins cant always outpace quitters. Thats why many diamonds and above fall out of qualification. Even those who maintain qualification do so with enormous effort meaning they have no freedom in their lives and only modest income. They work the business seven days a week for years. No evenings free , no weekends free, no vacation. Constantly showing the plan , meetings , functions. A diamond earns 147 k on average annually. Less taxes and expenses this is a net of maybe 40 k. And this is for a couple. As soon as they stop the business crumbles. Soon some of these first wave of high pins will be coming to retirement age. None of them can do so. In a nutshell its just not worth it. True there are a few big winners , but only a handfull. All of those who made wealth have groups of tens of thousands of people. Realistically this is out of reach. I studied the opportunity 30 years ago and decided no. No matter how i looked at it this was an awfull business. Unsaleable products , low commissions , entirely under control of upline , full dependence on downlines,40 hours per week in addition to normal job,probably 10 years to get to diamond and first taste of profits and statistically a 0,001% chance of reaching diamond The best decision i ever made.

ScAmway platinums to Q12 don't make a net profit. Sure they flash to impress 10k checks to their starry eyed adherents who have no concept of gross and net profits nor the 101 on running a business. Anything that resembles a profit is gobbled up by innumerable expenses. Ruby or sapphire level and up is where they start to net a "profit." However, I assert that is not a profit if 95% of the sales are not generated from without ScAmway but from within as is usually the norm. Effectively therefore, then without a respectable 70%+ sales to outsiders it's not a business but a self consumption model that has to rely on recruiting and recruits self-consuming for it to harvest money. Further, everyone in this setup who's making money is not making a real business profit but taking a cut from $$$ flowing up a pyramid derived not from real customers but injected from the pockets of a mass self-consumption community. Thus, I am sure you can understand that diamonds, dbl diamonds, CAMs, etc incomes don't impress me at all.

I think you are right. Diamonds income after taxes and expenses is pretty average. Given it takes 10 years to get there it is small reward. Most diamonds have difficulty to requalify. To do so they need to continue working it full time. There are of course pins who share in tools money. These guys make good income. But there is only a small number. Finally this is a business where yo can never retire. If you do it crumbles. Cant see what the attraction is.

A lot of views on this business. The amway leaders talk the dream and by definition this can justify anything and everything. But lets look at facts given by amway itself. Amway says 1% make platinum. Amway says 41% of ibo are active. Amway says average ibo income gross monthly is 200 dollars. The products are great. Amway says only 4% of sales are to non iboI think this is honest information and sums up the opportunity. You will be lucky to even achieve the above results. So if anyone thinks the business can deliver better than that then let them produce facts. Now lets look at what uplines say. You can be diamond in 2 to 5 years. Those who achieved diamond on average take nearly ten years. At diamond you have millionaire living. Amway says average diamond gross annual income is 147 k. After expenses and taxes thats 40 k and for a couple. 20 k net each. Most diamonds fail to requalify so income dwindles. The plan say 15 hours a week. All diamond success stories say 7 days a week for years. The plan says freedom. The nature of the business is that if you stop working it crumbles. So you are never free. Nobody has walked from it. Nobody has retired. Even the few who built several diamond and above legs in the seventies and eighties are still working well past retirement age. There are some wealthy amway distributors. They made most of their income from the 'secondary' business of tools. This is very profitable no doubt. But its just a few who benefit from it.

Jeezuz Anon, you spilled it all. FTC should hold major MLM awareness rallies and invite you as the main and only speaker. Thanx for sharing the truth. That is what is in ScAmway and pretend MLM "industry" at large.

Yes Joecool, when facts are not substantial enough to justify the claims we need to get into something called 'belief'. these privately held organisations can publish whatever they want because public have no shareholding. everyone's good at coming up with excuses, so systems may get better excuses after all the brainstorming over the years

About Me

I am writing this blog based on my experiences in the Amway/Quixtar business and the opinions I have formed based on those experiences.
I ran a 4000 PV business (with eagle parameters) only to discover that I was not profitable!
I'm not here to encourage any IBOs to quit, nor do I wish anyone to fail. I do encourage IBOs to ask their upline tough questions and I encourage IBOs to closely monitor their profit and losses as does a traditional business owner.

When I was an IBO, and even now, there is ample evidence that uplines continue to teach contradictory and poor business advice. I believe th...

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